Intrinsic vs. Relative Value

While shooting the breeze at happy hour yesterday, some colleagues and I were discussing valuation. Personally, I’m a big believer in using comparables to find a relative value. It lines up closer to what my father always said which was, “It’s only worth what someone will pay for it.”

My colleague was big on intrinsic value via DCF. In my humble opinion, DCF models are inherently skewed and easily become GIGO though too much optimism.